Apple CEO Tim Cook takes a 40% pay cut after shareholder vote

Tim Cook, CEO of Apple Inc., speaks during a “First Tool-In” ceremony at the TSMC facility under construction in Phoenix, Arizona, on Tuesday, Dec. 6, 2022.

Caitlin O’Hara | Bloomberg | Getty Images

An apple CEO Tim Cook will take a pay cut in 2023 to $49 million in total compensation, the company said in filing with the SEC.

Cook requested the change, Apple said in the filing, after a shareholder vote on his pay package. The company also reduced the number of restricted shares Cook will receive if he retires before 2026.

In 2022, Cook earned just under $83 million in stock awards, $12 million in incentives and $3 million in salary. He also received benefits including pension plan contributions, security, personal plane travel and over $46,000 in vacation time.

Apple’s compensation committee said it made the change in response to last year’s vote in which 64 percent of shareholders approved Cook’s compensation, down from 95 percent who approved it for Apple’s 2020 fiscal year.

Still, Apple’s board praised Cook’s performance and said it had confidence in the executive’s long-term strategic decisions.

Recently, executive compensation has come under increasing pressure from institutional shareholders. The Office of Institutional Shareholders recommended that Apple shareholders vote against Cook’s pay package at last year’s annual meeting.

The compensation committee, consisting of Art Levinson, Al Gore and Andrea Jung, said it reached out to institutional shareholders to gauge how they felt about Cook’s pay.

“Based on these important conversations, we have made changes to the amount and structure of Tim’s compensation for 2023,” the committee wrote.

There may be more changes.

“Given Apple’s comparative size, reach and performance, the Compensation Committee also intends to position Mr. Cook’s target annual compensation between the 80th and 90th percentile relative to our core peer group for future years,” the committee said .

Cook is paid primarily in restricted stock units. The number of actual Apple shares that Cook gives depends on Apple’s performance against the S&P 500. Apple stock is doing well enough that Cook usually gives the maximum amount.

Since Cook took over as CEO in 2011, Apple shares have returned 1,212 percent, versus 290 percent for the S&P 500, Apple said.

In addition to reducing the overall target, 75% of Cook’s vested shares will be tied to Apple’s stock performance in 2023, instead of 50%.

Apple announced a stock grant for Cook in September 2020 to 2025. Cook received it on the first day of Apple’s 2021 fiscal year, which began in late September. When approved, Cook’s stock grant would have given him 1 million shares, worth about $114 million at the time, if Apple met all of its targets.

Cook’s previous stock grant from 2011 turned out to be worth more than $900 million at Apple Stock price in September 2020.

Cook said in 2015 that he planned to donate his fortune to charity.

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